PJM power generators feeling burned by new cost policy

The American Wind Energy Association (AWEA) and Mid-Atlantic Renewable Energy Coalition (MAREC) filed a joint Nov. 18 protest with the Federal Energy Regulatory Commission over a PJM Interconnection plan to change a cost factor in its generator interconnection agreements.

PJM on Oct. 28 proposed revisions to its Open Access Transmission Tariff (OATT) to include a requirement for interconnection customers to pay for the installation and maintenance of phasor measurement units (PMUs), also known as synchrophasers, when interconnecting a new generator equal to or greater than 100 MW in size.

“PJM’s proposal is inconsistent with the Commission’s cost allocation principles for the interconnection of generators, and would impose costs that are not just and reasonable on interconnection customers,” the two protesters said.

Specifically, they said, PMUs would provide greater benefits if they were installed on the integrated network of the bulk power system and not at the site of interconnecting generators. Nearly all of the benefits of PMU installation accrue to the transmission service provider and not to the generators, and the installation of PMUs is not essential for the reliable interconnection of new generators, so PJM’s proposal therefore fails the “but for” and beneficiary pays tests for these costs to be allocated to the interconnecting generators, they added.

“PJM has failed to provide evidence that the installation of PMUs at generator sites will provide significant benefits to the interconnecting generator, or, for that matter, the power system, and has also failed to demonstrate that installing PMUs at the generator site will provide greater benefits than if the PMUs were installed on the integrated network of the bulk power system,” they wrote. “PJM’s proposal represents an unprecedented cost shift in assigning system reliability and operation costs to generators, which in many cases have no captive customer base or rate mechanism to recover the cost to comply. As a result, we respectfully request that PJM’s proposal be rejected, or, in the alternative, the cost of PMU installation and operations be allocated to PJM’s transmission costs and not to interconnecting generators, consistent with Commission precedent for the allocation of transmission costs.”

PJM is requesting an effective date of Dec. 28 and the new requirement will apply to all interconnection customers proposing a new customer facility larger than 100 MW entering PJM’s interconnection queue on or after Oct. 1, 2012 which have not yet entered into an interconnection service agreement.

PJM says the phasors would benefit both the grid and the generators

Said PJM in its Oct. 28 application: “Over the past few years, PJM has been working with the U.S. Department of Energy (‘U.S. DOE’) and its member Transmission Owners to deploy SynchroPhasor measurement devices in its system. PMUs provide continuous, high-speed (30 scans per second versus one scan generally every 4-10 seconds under current methods) records of conditions on the system, including frequency, voltage, and phase angle relations. By the end of this year, PJM will receive SynchroPhasor Data from 97 substations; however none of them are located within generation stations.”

As DOE recently noted, more needs to be done to enable system operators to dynamically utilize PMU data in their planning processes, PJM said.

“High resolution SynchroPhasor Data can be obtained through installation of PMUs on the generator’s side of the point of interconnection,” PJM argued. “Installation on the generator side of the point of interconnection provides unique benefits that cannot be obtained solely by installation of PMUs on transmission owner facilities. Such data is integral to improved communications and to the reliability of the system, and has benefits to both the system and the generators.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.